decided: July 5, 1979.
IN THE MATTER OF THE ESTATE OF BOIES PENROSE, DECEASED. APPEAL OF R. & R. INVESTMENT CORPORATION, APPELLANT
Nos. 610 and 636 January Term, 1977, Appeal from Decree of July 29, 1977 and Decree of August 3, 1977 entered by the Court of Common Pleas, Orphans Court Division, County of Chester at No. 1976-232.
Herbert J. Bass, Fox, Rothschild, O'Brien & Frankel, Israel Packel, Philadelphia, for appellant.
John G. Shea, Bryn Mawr, for appellees, Charles B. B. Penrose, et al.
Dallett Hemphill, West Chester, for appellees, First Pa. Bank, et al.
Noah D. Cutler, Radnor, for appellee, James W. Keeley, Jr.
Israel Packel, Philadelphia, for R. & R. Investment Corp.
Eagen, C. J., and O'Brien, Roberts, Nix, Manderino and Larsen, JJ.
[ 486 Pa. Page 11]
OPINION OF THE COURT
Boies Penrose died on February 27, 1976. His estate included real property in Chester County consisting of his residence, other improvements, and forty-four acres of land. On June 30, 1977, the executors of his estate entered into a written agreement for the sale of the realty to the R. & R. Investment Corporation ("R. & R.") for $512,500. The agreement of sale was subject to several conditions including governmental approval of a subdivision plan, the issuance of building permits, and the availability of a 98% four-year mortgage at a rate of interest not to exceed 10%. The agreement also expressly provided that the sale was contingent upon the approval of the orphans' court.
On July 8, 1977, the executors filed a petition for approval of the sale to R. & R. in the Court of Common Pleas of Chester County, Orphans' Court Division. Charles Penrose and Frances Penrose Haythe, the son and daughter of decedent who share a life interest in his estate, objected to the proposed sale claiming inter alia that the executors were in receipt of a more favorable offer from James Keeley. Keeley offered to purchase the realty for $550,055, subject to a subdivision contingency but not a mortgage contingency. After an evidentiary hearing the court on July 29 refused to approve the sale to R. & R. Its decree fixed August 2, 1977, as the date on which the court would receive additional bids for the property and directed that the property would be "knocked down to that bidder making the highest, least conditional offer accompanied by a deposit equal to five percent of the bid price." In the court proceeding, the Barbados Hill Corporation ("Barbados"), a company owned entirely by Charles Penrose, made a bid of $543,052.80 without mortgage or subdivision contingency. On August 2, 1977, the court determined that this was the best bid and upon the conclusion of the "auction," the executors entered into an agreement of sale with Barbados. On the same day the executors filed a motion requesting the court's approval of the proposed sale and on August 3, 1977, the court approved the sale.
[ 486 Pa. Page 12]
R. & R. filed this appeal from the July 29 and August 3 decrees contending that the court's disapproval of the proposed sale to it and the court's approval of the sale to Barbados were both in error. R. & R. argues that the court's rejection of the R. & R. agreement was improperly based upon a consideration of a higher offer which, R. & R. claims, arose after the execution of the agreement with R. & R. Additionally, R. & R. complains that the orphans' court was without authority to order an auction of the property. The executors and Charles Penrose, appellees, argue that the orphans' court acted properly both in refusing to approve the agreement with R. & R. and in approving the sale to Barbados.
Our review satisfies us that the court properly exercised its discretion and committed no error of law in disapproving the R. & R. agreement of sale and in approving the sale to Barbados. We affirm the decrees of the orphans' court.
The decedent's will conferred upon his executors express powers in their sole discretion "to sell at public or private sale, for cash or credit, with or without security, to exchange or to partition real or personal property and to give options for sales or exchanges." The testamentary grant to the executors of the express power to sell relieved them of any requirement to obtain court approval of a sale of estate property. Nonetheless, the executors were not precluded from including in the R. & R. agreement a provision making the sale of the estate realty subject to approval of the orphans' court. E.g., Stone Estate, 358 Pa. 335, 56 A.2d 664 (1948). Upon submission of the agreement to the court, it was for the court to determine whether the proposed sale was in the best interests of the beneficiaries under the decedent's will. Curtis Estate, 437 Pa. 123, 261 A.2d 589 (1970).*fn1
[ 486 Pa. Page 13]
Here, after a hearing, the orphans' court found that "[t]he R. & R. agreement for which initial approval was sought was not in the best interests of the Penrose estate." The court found that the higher Keeley offer was made before execution of the R. & R. agreement, that the executors failed to give the Keeley offer due consideration, and that the estate was harmed by having lost the opportunity to consider that offer. R. & R. asserts that the Keeley offer arose after the R. & R. agreement and should not have been considered by the orphans' court in reviewing the petition to approve the sale to R. & R. Competent and adequate evidence, however, supports the court's conclusion to the contrary.*fn2 We may not disturb findings of fact of the
[ 486 Pa. Page 14]
orphans' court which are "supported by competent and adequate evidence and are not predicated upon capricious disbelief of competent and credible evidence." La Rocca Trust, 485 Pa. 236, 401 A.2d 746 (1979) (quoting Cohen Will, 445 Pa. 549, 550, 284 A.2d 754, 755 (1971)). The court's disapproval of the sale to R. & R. must therefore be sustained.*fn3
[ 486 Pa. Page 15]
If the orphans' court had merely disapproved the R. & R. agreement, as it had the authority to do on the record before us, no further discussion would be necessary. However, after entering the decree disapproving the R. & R. sale, the court established a procedure by which an offer better than that of R. & R. might be obtained. As noted earlier, the court directed that on August 2, 1977, those wishing to bid on the estate property must do so at an auction to be conducted by the court. R. & R. argues that the court had no authority to direct and conduct this proceeding.
At the auction on August 2, prior to receiving any bids, the court announced that the bidder whose bid was accepted by the court would be required immediately to present its offer in writing. Bids from Keeley, R. & R. and Barbados were received by the court. The Barbados bid of $543,052.80 was equal in face amount to a bid from R. & R. but, unlike the R. & R. bid, contained no mortgage or subdivision contingency. Because this price was not subject to any
[ 486 Pa. Page 16]
realtor's commission, the net gain to the estate over and above the sale price in the June 30th R. & R. agreement, which would have been reduced by a realtor's commission, was $61,302.80. As earlier noted, the court accepted the Barbados bid, the executors and Barbados entered into an agreement of sale, and upon the motion of the executors the court approved that agreement.
On this record it is unnecessary to pass on the court's authority to direct and conduct an auction for the sale of the estate realty. Even if the auction proceeding were deemed to constitute a procedural defect, that would not justify disturbing the sale to Barbados. See Section 1, R. 2, S.Ct.Orph.Ct.R. Here the executors indisputably possessed the power to enter into the agreement with Barbados. No objection to that sale was ever interposed by any party having a beneficial interest in the estate. The orphans' court after hearing and consideration approved the sale and the record discloses that in doing so it committed no abuse of discretion or error of law.
The decrees of the orphans' court are affirmed. Appellant to pay costs.